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An Evaluation of HRM at Tesco

Executive Summary

The paper examines the human resource management (HRM) at Tesco, a UK-based company that operates in the retail industry. In today's competitive business environment, HRM is an essential component for any company that wants to realize its strategy, objective, and mission. The paper is organized into four sections. The first section provides the company's background information. The second section evaluates the roles of human resources (HR). Tesco's HRM team performs various roles, including recruitment and selection, performance management, and motivating employees through rewards, training, and development. The third section examines the HR methods. Tesco uses both soft and hard approaches to HRM. By focusing on business performance, while paying attention to employees' concerns, the company has improved its performance and competitiveness. The last section focuses on the processes and methods of employees and management development. Tesco adopts a personal development plan, workshops, VAK learning theory, and Honey and Mumford learning style for development. The company must continue to place a high value on employees to maintain its leading position in the market.

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An Evaluation of HRM at Tesco PLC

Today's competitive business environment demands organizations to focus on human resource management (HRM) due to its essential role in realizing a company's strategy, objective, and mission. HRM is an essential component of a company that deals with the people dimension. It is a process of managing people and considering the behaviors, importance, functions, and responsibilities of employees. Every company is composed of people and maintaining their commitment to organizational goals to thrive and succeed in the modern business environment is crucial. Parameswari and Yugandhar (2015) assert that managing people using a human approach enables a manager to view employees as valuable business assets. Such an approach enables a company to utilize human resources not only for its benefits but also for the self-satisfaction, growth, and development of employees. HRM helps people to enjoy their human dignity by taking into account their abilities, commitment, skill, motivation, achievements, talents, and capacity. Therefore, HRM is a system that focuses on the development of human resources (HR) and effective management of employees so that they feel satisfied with their employment. According to Ali (2013), most of the problems in today's business world are human and social failures rather than economic, physical, or technical ones. Organizations without a proper setup for HRM face many challenges in their regular activities due to the inability to manage human resources and improve employees' commitment to organizational goals. The paper investigates HRM in Tesco PLC, the largest retailer and private employer in the UK.

Company Profile

Tesco was established in 1919, and it has maintained a leading position in the retail industry worldwide. The company's founder started as a market trader in East End London; however, after he visited the US, he established a self-service model for food retailing and opened the first branch in 1947 (Payne & Frow, 2013). Tesco has undergone many developments, and today it is a global company offering a wide range of products, including food products, clothing, electrical appliances, financial products, and telecommunication products under five types of stores, namely express, metro, superstore,, and extra (Zentes, Morschett, & Schramm-Klein, 2017). Tesco was the first company to introduce a loyalty card, which has proven to be a useful marketing tool and a valuable source of information on consumers spending patterns. The company expanded its operations to foreign countries, including Hungary and Eastern European countries, through acquisition (The Czech Republic and Slovakia). By 2004, the company had expanded its operations through acquisition to various countries, including Thailand, South Korea, Taiwan, Poland, France, Japan, and China. However, businesses in Taiwan and Japan were not successful. Tesco also sold the majority of its stores in China. Tesco is the largest private business employer with 330, 000 employees in its 3146 stores across 12 countries (Tesco PLC, 2014). The company's strategy is to broaden its scope of business worldwide and gain a competitive advantage.

HR Roles

Tescos competitive advantage and success are dependent on the management of HR. Ulrichs model of HR roles influences the organization's decisions regarding the role of the HRM team. The model suggested four HR roles, which were later updated to help the organization overcome the twenty-first-century challenges by introducing a new team leader and incorporating the change agent role into the strategic partner role (Becker, Huseid, Ulrich, & Brockbank, 2015). HRM in Tesco has redesigned its HR function efficiently to assume the roles emphasized by Urich. HR professionals in Tesco assume the role of strategic partners, which has been accentuated due to technological advancement, globalization, diversity, and cultural complexities. The HR department has redesigned its processes and policies relating to rewards, performance management, recruitment, and selection processes to make work behavior congruent with the organizational goals. Tesco line managers are considered the powerhouse in HRM, as they are given the authority to recruit, measure performance, and plan training and development. They leverage organizational capabilities and foster teamwork.

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HR profession in Tesco focuses on meeting employees' needs to ensure that their contribution to the business remains high in terms of competence and commitment. The HRM team of Tesco recognizes employees as the business asset and integrates the workforce in the way to help the company achieve its goals. The company launched a program that helps the HRM team to receive feedback from employees to learn about their expectations and attitude towards the organization. The HR strategies are grounded on staff feedback. According to Proctor (2014), feedbacks are useful in strengthening the bond between employees and the company by promoting mutual understanding and respect. The firm also ensures that the staff understands their roles in the company. The company has six work levels, and for each of them, the skills and the knowledge needed are stated.

Recruitment and Selection

Tesco is heavily reliant on workforce planning, which runs annually to facilitate recruitment and selection. The work planning system helps the company to recognize the need for new staff both in managerial and non-managerial positions. The planning system ran annually and was reviewed quarterly. Some of the elements in the work planning table include a clear description of the job and the skills needed. Tesco uses cost-effective methods to advertise job vacancies (Tesco PLC, 2017). First, the company has developed a talent plan, which is used to assess its current employees to fill a position. A talent planning scheme provides employees with an opportunity for growth and development to help them move up the chain. The process involves listing the current employees looking to move to a different store or department at the same level or seeking promotion. If the company cannot find an employee who meets the job specification in the talent plan, it uses internal recruitment. In this process, the company advertises the job on its intranet for two weeks to fill the position from within the company. The firm also uses external recruitment to fill vacancies outside the organization. The company uses a wide range of platforms to attract talented candidates such as vacancy boards in its stores or its website. For the vacancies that are specialized in nature or hard to fill, the company advertises through television, radio, google vacancy, and magazines.

In Tesco, the selection of the applicants follows three stages. In the first stage, the line managers screen the applicants to identify those that match the job specification. The successful candidates are invited to an internal assessment center carried out by managers in stores (Tesco PLC, 2017). They are given various tasks, including problem-solving and teamwork exercises, which involve the challenges they might face when working in the organization. Those who are approved are invited for an interview, which is conducted by the line managers to identify the one best fit for the company.

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Reward and Performance

Tesco recognizes that it needs motivated and happy employees for the continued growth of the company. Rewards increase employees' performance and commitment to the organization by boosting their motivation (Burton, 2012; San, Theen, & Heng, 2012). The company offers a wide range of rewards such as long service awards, personalized annual reports, and privilege cards to motivate employees. The firm appreciates that employees are unique and have diverse lifestyles and, thus, supports them with a work-life balance through various rewards such as company share options, staff discounts, competitive salaries, flexible working hours, and health benefits (Tesco PLC, 2017). The reward system implemented by Tesco is similar to Taylor's theory of motivation. It offers financial reward packages for employees with outstanding performance. However, the firm outdoes Taylors theory and uses factors other than money to motivate employees in their working and personal lives. It offers targeted and relevant benefits to support varied individual lifestyles to improve output. Moreover, line managers collect employees' feedback annually through a staff satisfaction survey called Viewpoint to assess their views on all organizational aspects.

Tesco adopts the mayo effect in its reward system. According to the Mayo effect theory, employee motivation is promoted by both internal and external factors such as teamwork, communication, shared decision-making, and ensuring the well-being of others (Thapa & Adhikari, 2013). Mayo's effect operates throughout Tesco with the application of effective communication meetings, newsletters, intranet, and appraisals. The company also adopts goal-setting theory in performance management through reward objectives to motivate employees and increase their satisfaction with the job.

Other theories adopted in Tescos reward systems include Maslow and Herzberg's motivation theories. For Maslow's theory, Tesco recognizes employees' contribution to the company and offers a development program. The company emphasizes self-respect and promotes teamwork to meet social needs. The company meets security needs by providing formal contracts of employment and pension, and by creating a safe working environment (Kaur, 2013). Herzberg's theory can be seen in Tesco motivation practices. The company motivates employees by enabling satisfiers and paying attention to their hygienic factors. It involves employees in the decision-making process to empower them. For example, employees are motivated to make decisions on restaurant menus.

Tesco uses appraisal systems to measure employees' performance. According to Schroeder (2012), a firm must monitor and measure employees' progress to capitalize in business terms on their achievements and identify areas that need improvement. Qureshi and Hassan (2013) reported that a performance management system helps a company to provide feedback regularly, and thus it improves employees' performance and supports the accomplishment of overall organizational goals. Companies can assess the impact of employees' behavior within the organization by designing appropriate performance metrics.

Training and Development

Continuous training and development motivate employees. Tescos employees have access to the training they need to perform their tasks and experience growth within the company. The company has a well-structured and flexible training and development approach that meets employees' needs. It determines the staff training needs at three levels, namely management, operations, and consumer level (Tesco PLC, 2017). The line managers offer strategic career planning to help employees achieve outstanding performance. Employees are trained through job rotation and coaching. The company evaluates training and development using such tools as checklists, measures, timetables, and schedule tasks. Continuous training enhances employees' skills, which directly boosts the company's performance.

HR Methods

There are two models utilized by organizations to manage employees, namely soft and hard approaches. The hard approach is grounded on strict strategic control and theory X. It is closely related to scientific management because it does not highly engage employees or allow them to participate actively in organization growth. The hard approach judges the effectiveness of HRM based on business performance criteria and makes little emphasis on employees' concerns (Ihuah, 2014). On the contrary, the soft model is premised on theory Y and control through commitment. It makes emphasis on human relations while integrating business objectives with the HR policies. It views employees as being able to foster the company's development and as a source of competitive advantage. The model helps managers to release the untapped reserves of human resourcefulness by increasing employees' involvement, participation, and commitment (Ishak, Abdullah, & Ramli, 2012). Apart from emphasizing business performance, the soft approach focuses on employees' concerns. According to Ihuah (2014), the soft approach is the best practice in the management of different HR as it enhances the efficiency of performance towards achieving organizational goals. Paying attention to employees' concerns increases their motivation and commitment to an organizational goal.

Tescos's HR practices and policies demonstrate both hard and soft approaches. The company continuously invests in HR through employee participation and empowerment. The main component in hard HRM is HR planning, which relates to a company's production process. It evaluates the employee's performance to measure the effectiveness of the HR planning process. Strategies used to evaluate HR planning include manager feedbacks, customer feedback, and appraisal systems. The firm provides training programs based on performance evaluation to address issues related to employees' skills.

Tesco also uses the soft model as it places a high value on HR and involves employees in strategic direction discussion. All staff members are considered important in the overall strategy; thus, the firm offers training and job descriptions to help them understand their role and contribution to organizational success. Tescos training exceeds the government's recommendation for employee empowerment. The HR department has taken a strategic role to increase employee training. The training considers workforce diversity and encompasses all learning skills. By making employees continuous learners, Tesco supports their growth by equipping them with the right set of competencies. The training and development are tailored to meet the learning needs and skill level of each employee. According to Burton (2012), placing a high value on employees increases their performance. Successful organizations address employees' issues and keep them at the core of their planning and decision-making. Elnaga and Imran (2013) assert that training is the only means to keep employees up-to-date and gain a competitive advantage with knowledge and outstanding customer service. Investment in training is vital in ensuring business success in an increasingly competitive environment.

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Processes and Methods of Development

Development is an essential component in organizational success. Hameed and Waheed (2011) define employee development as the enhancement of abilities of staff members and the organization as a whole. Development helps staff acquire professional knowledge and skills not only for their growth but also for the growth of the organization (Kulkarni, 2013). Managerial development attempts to improve the effectiveness of HRM through the learning process. The development delivers positive results by helping a business to stay ahead of the competition. Tesco holds annual career discussions with all the staff and uses 360-degree feedback to support the development of the whole person. A 360-degree feedback system helps employees understand their strengths, weaknesses, and behavior within the workplace (Meenakshi, 2012). Employees use the feedback to assess themselves and create a personal development plan (PDP). The plan helps the managers to give meaningful feedback that provides opportunities for development and enhancement of abilities to help employees reach their full potential through self-assessment. Moreover, the system creates a two-way relationship that increases employees' commitment to the company's values. Greenan (2016) reported that personal development increases employees' motivation and helps them to become more productive and valuable to the company. Development increases employees' performance, as they are more satisfied and committed to their job.

Tesco development practices are linked with the visual-auditory and kinesthetic (VAK) learning theory and adopt auditory and kinesthetic approaches to employee development. The theory encourages the use of the most preferred instruction style to improve learning abilities. Ahmad, Jehanzeb, and Alkelabi (2012) note that learning theories aid in understanding factors that influence the performance of the workforce. The company uses discussion, reading materials, and practical tasks to develop employees and management. Through workshops, the firm provides employees with an opportunity for practical tests, which enhances their efficiency and performance. According to Colorosa and Makela (2014), matching the learning style to individual strength improves learning abilities. Adopting a learning style to meet individual levels increases employees' knowledge and helps them to utilize their full efforts and skills to achieve organizational goals.

Management development approaches at Tesco include workshops that offer a long-term development strategy that focuses on leadership behavior and effective skills. Another program for building management is encouraging reflection and self-review. The approach enables staff to assess their strengths and find ways to demonstrate traits that support long-term business development. Management develops positive leadership needed to manage human resources successfully

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Tescos's development also adopts Honey and Mumford's learning style, which is premised on Kolb's work and identifies four learning styles, namely pragmatist, theorist, reflector, and activist. Honey and Mumford argue that individuals prefer different learning styles and preferences that affect learning outcomes (Sarabdeen, 2013). Tescos's HR development is reliant on three learning styles defined by Honey and Munford to enhance staff capabilities. First, the company uses an activist learning style when overcoming challenges such as launching products. Various functions are performed using discussions, qualities of learning tasks, and employees' ability to address problems. Second, Tesco uses a reflector learning style to evaluate employees' job operations by considering feedback from either customers or colleagues. Lastly, Tesco uses a pragmatist learning style to solve problems through proper planning. Proper planning helps the company to support employees to adapt to changes in the environment and accept challenges.


All organizations are composed of people, helping them to achieve their full potential through skills development, acquiring their services, and motivating them to achieve organizational goals. Tesco has effective HRM practices that are integrated with the organizational goals. Through training and development, the company ensures that the employees become positive assets and achieve long-lasting competencies needed to address the challenges and competitiveness in the business world. The company has also maintained a leadership position by evaluating employees and organizational performance so that the staff can continually adapt to changes in the market. It must continue using the human approach by emphasizing staff training and development, recruitment of the best talent, performance management, and rewards to maintain its competitive edge.

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